Rocketing buy now, pay later stocks accepted US PPP loans

The buy now, pay later stocks storming the ASX drew on America's small business lifeline, the Paycheck Protection Program, to obtain potentially forgivable loans targeted at struggling delis, salons and doctors to avert devastating job losses at the height of COVID-19, US Treasury disclosures reveal.

Sezzle, Splitit and Zip's QuadPay are among several Australian or US-Australian companies that joined Tito's Restaurant in San Antonio, Texas, and Gulf Coast Plumbing in Tampa, Florida, and hundreds of thousands of other businesses in accepting relief.

But unlike the Morrison government's JobKeeper, the PPP scheme was specifically designed for small businesses.

While it is not off limits to listed companies, it is worded such that participants are not expected to have the cushion of capital markets, inviting widespread early criticism and bipartisan support for tightening the conditions of participation.

“QuadPay is not yet part of the Zip family but I can confirm QuadPay applied for and was granted a PPP loan.

“The stimulus program was designed to rescue workers, not the C-suite, and GetSwift is following not only the letter but also the good-faith spirit of the program: 100 percent of the company’s PPP funds will support payroll, utilities and rent during these challenging times," said GetSwift spokesman James Richardson.

Fremont, California-based ASX junior Pivotal Systems, which develops gas-flow monitoring technology, expected to save 30 jobs.

"In the US under the PPP loan, Navitas accessed a very nominal sum to support staff.

While there is no barrier to publicly traded companies applying, Treasury agreed to review loans exceeding $US2 million after ongoing outcry from small business advocates, including Senator Elizabeth Warren, who co-signed a letter in April seeking assurance "that these funds are helping the businesses they are designed to help".

Marco Rubio, US senator and chairman of the Senate committee on small business and entrepreneurship, in May told the floor: "You know, we've heard the reports about publicly traded companies, we all know how we feel about that, and I'm glad that that's being addressed right now.